Page 215 - SAIT Compendium 2016 Volume1

s 25BA INCOME TAX ACT 58 OF 1962 s 25BB
be deemed to have directly accrued to the person on
the date of the distribution; and
(b) to the extent that the amount is not distributed as
contemplated in paragraph (a) within 12 months after its accrual to, or in the case of interest, its receipt by that portfolio—
(i) be deemed to have accrued to that portfolio on the last day of the period of 12 months commencing on the date of its accrual to or receipt by that portfolio; and
(ii) to the extent that the amount is attributable to a dividend received by or accrued to that portfolio, be deemed to be income of that portfolio.
[Para. (b) substituted by s. 55 (1) of Act 24 of 2011, amended by s. 58 (1) (b) and (c) of Act 22 of 2012 and substituted by s. 73 (1) (c) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted paragraph applies in respect of years of assessment commencing on or after that date.]
[Sub-s. (1), previously s. 25BA, inserted by s. 39 (1) of Act 17 of 2009, amended by s. 49 (1) (b) of Act 7 of 2010 and renumbered by s. 73 (1) (a) of Act 31 of 2013 – date of commencement: 1 January 2014; the renumbered subsection applies in respect of years of assessment commencing on or after that date.]
(2) Where a portfolio of a hedge fund collective investment scheme is constituted as a partnership any amount allocated by that portfolio to the partners in that partnership must for the purposes of subsection (1) (a) be treated as having been distributed by that portfolio to the partners in that partnership by virtue of those partners being holders of participatory interests in that portfolio.
[Sub-s. (2) added by s. 73 (1) (d) of Act 31 of 2013 – date of commencement: 1 January 2014; the added subsection applies in respect of years of assessment commencing on or after that date.]
[S. 25BA inserted by s. 39 (1) of Act 17 of 2009 and amended by s. 49 (1) (b) of Act 7 of 2010.]
25BB Taxation of REITs
(1) For the purposes of this section—
‘controlled company’ means a company that is a subsidiary, as de ned in IFRS, of a REIT;
‘property company’ means a company—
(a) in which 20 per cent or more of the equity shares or linked units are held by a REIT or a controlled company (whether alone or together with any other company forming part of the same group of companies as that REIT or that controlled company);
and
(b) of which at the end of the previous year of assessment
80 per cent or more of the value of the assets, re ected in the annual nancial statements prepared in accordance with the Companies Act or IFRS for the previous year of assessment, is directly or indirectly attributable to immovable property;
[Para. (b) substituted by s. 45 (1) (a) of Act 43 of 2014 – date of commencement deemed to have been 1 April 2013 – the substitution applies iro years of assessment commencing on or after that date.]
‘qualifying distribution’, in respect of a year of assessment of a company that is a REIT or a controlled company as at the end of a year of assessment, means any dividend (other than a dividend contemplated in paragraph (b) of the de nition of ‘dividend’) paid or payable, or interest incurred in respect of a debenture forming part of a linked unit in that company if the amount thereof is determined with reference to the nancial results of that company as re ected in the nancial statements prepared for that year of assessment if—
(a) at least 75 per cent of the gross income received by or accrued to a company during the rst year of assessment that the company quali es as a REIT or controlled company, consists of rental income; or
[Para. (a) substituted by s. 50 (1) (a) of Taxation Laws Amendment Act, 2015 – date of commencement deemed to have been 1 April 2013; the retrospective substitution applies iro years of assessment commencing on or after that date.]
(b) in any other case, at least 75 per cent of the gross income received by or accrued to a REIT or a controlled company in the preceding year of assessment consists of rental income:
Provided that any amount that must be included in the income of the REIT or controlled company in terms of section 9D (2) must not be included in the gross income of the REIT or controlled company in respect of that year of assessment for the purposes of this de nition;
‘rental income’ means any amount received or accrued—
(a) in respect of the use of immovable property, including
a penalty or interest in respect of late payment of any
such amount;
(b) as a dividend (other than a dividend contemplated in
paragraph (b) of the de nition of ‘dividend’) from a company that is a REIT at the time of the distribution of that dividend;
(c) as a qualifying distribution from a company that is a controlled company at the time of that distribution; or (d) as a dividend or foreign dividend from a company that is a property company at the time of that distribution. (2) (a) There must be deducted from the income for a
year of assessment of— (i) a REIT; or
(ii) a controlled company that is a resident,
the amount of any qualifying distribution made by that REIT or that controlled company in respect of that year of assessment if that company is a REIT or a controlled company on the last day of that year of assessment.
(b) The aggregate amount of the deductions contemplated in paragraph (a) may not exceed the taxable income for that year of assessment of that REIT or that controlled company, before taking into account—
(i) any deduction in terms of this subsection;
(ii) any assessed loss brought forward in terms of section
20; and
(iii) the amount of taxable capital gain included in taxable
income in terms of section 26A.
(2A) For the purposes of calculating the taxable income
in respect of a year of assessment of a REIT or a controlled company as contemplated in subsection (2) (b)—
(a) where—
(i) a REIT or a controlled company is a bene ciary of a vesting trust that is not a resident; and
(ii) the trust contemplated in subparagraph (i) is liable for or subject to tax on income in the country in which that trust is established or formed,
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Prelex
Wording of para. (a) in force from 1 April 2013 until its retrospective substitution (by s. 50 (1) (a) of Taxation Laws Amendment Act, 2015) wef the same date
(a) at least 75 per cent of the gross income received by
or accrued to a REIT or a controlled company until the date of the declaration of that dividend consists of rental income where a REIT or a controlled company is incorporated, formed or established during that year of assessment; or
INCOME TAX ACT – SECTIONS